The cash transfers and food benefits given to the poor as COVID-19 relief so far “may not be adequate”, Union Finance Minister Nirmala Sitharaman conceded on Friday.
Facing criticism that the credit-heavy stimulus package does not provide sufficient cash support to people, the Minister noted that the first response of the government under the Pradhan Mantri Garib Kalyan Yojana was to give cash, food and cooking gas to vulnerable people.
“This may not be adequate, I grant that. Nothing can be adequate at this time, when people are cut-off, when people are staying put in their house when people don't have their money earned given to them, with their salaries not coming inNothing can be adequate. I grant that,” the Minister said, during the third in her series of press conferences on the Centre’s ₹20 lakh crore stimulus package.
The Finance Minister side-stepped queries on exactly how much of the stimulus package was actual expenditure from the government as opposed to liquidity financing measures, asking journalists to wait till the remainder of the package was announced.
Ms. Sitharaman and officials also countered rising criticism that the Atmanirbhar Bharat Abhiyan is too heavy on credit and low on actual budgetary expenditure.
“The important thing to understand is that liquidity is also helping the stressed sector in trying to come out of that stress,” said Economic Affairs Secretary Tarun Bajaj.
“What is the objective of doing that? One way could be to give the money from the budget, the other is to do it through a process that is different. So the objective also needs to be kept in mind.”
The Centre also refuted Congress leader and former Finance Minister P. Chidambaram’s allegation that other countries do not count such credit extensions in their stimulus calculations. “Most countries’ packages are a combination of actual fiscal outgos and liquidity provisions. This is a fact,” said Expenditure Secretary T.V. Somanathan, pointing out that the UK’s famed 15% package was almost entirely liquidity provisions
